Just did the following and seemed to work:
Added a new virtual interface in /etc/network/interfaces:
auto eth0.0
iface eth0.0 inet manual
Assigned a static IP to this new interface in /etc/dhcpcd.conf:
denyinterfaces eth0
interface eth0.0
static ip_address=192.168.1.201/24
Rebooted raspberry pi so that interface changes take effect.
Modified /etc/lighttpd/external.conf to modify bind address:
server.bind = "192.168.1.201"
Run pihole -r and reconfigured pihole to use the new virtual interface eth0.0 and use 192.168.1.201 as static ip.